Study: Closing gender wage gap would add 7% to GDP

The study assumed that the monthly wage gap would drop from its 2014 level of 39% to "just" 22% by 2039, which would lead to the 7% bump in the economy.

September 26, 2016 21:35
1 minute read.
Ultra-Orthodox women Israel

Ultra-Orthodox women work at Matrix Global, a hi-tech company, in the West Bank Jewish settlement of Modiin Illit April 3, 2011. (photo credit: REUTERS)


Dear Reader,
As you can imagine, more people are reading The Jerusalem Post than ever before. Nevertheless, traditional business models are no longer sustainable and high-quality publications, like ours, are being forced to look for new ways to keep going. Unlike many other news organizations, we have not put up a paywall. We want to keep our journalism open and accessible and be able to keep providing you with news and analyses from the frontlines of Israel, the Middle East and the Jewish World.

As one of our loyal readers, we ask you to be our partner.

For $5 a month you will receive access to the following:

  • A user experience almost completely free of ads
  • Access to our Premium Section
  • Content from the award-winning Jerusalem Report and our monthly magazine to learn Hebrew - Ivrit
  • A brand new ePaper featuring the daily newspaper as it appears in print in Israel

Help us grow and continue telling Israel’s story to the world.

Thank you,

Ronit Hasin-Hochman, CEO, Jerusalem Post Group
Yaakov Katz, Editor-in-Chief

UPGRADE YOUR JPOST EXPERIENCE FOR 5$ PER MONTH Show me later Don't show it again

If men and women earned the same salaries on average, the economy would be a whopping 7 percent bigger in the long run, according to a study the Finance Ministry Chief Economist's office unveiled Monday.

The study assumed that the monthly wage gap would drop from its 2014 level of 39% to "just" 22% by 2039, which would lead to the 7% bump in the economy.

Be the first to know - Join our Facebook page.

In 2015 terms, that 7% GDP increase would amount to about NIS 82 billion, or roughly a NIS 8,000 per capita increase in GDP.

The gender wage gap in Israel stems in part from the fact that women work fewer hours on average than men, and also because they tend to work in lower-salary industries. Women are underrepresented in the high-tech sector, for example, and overrepresented in education and health services.

Women also tend to move up the ranks less frequently than men, accounting for another portion of the wage gap. That’s why even in Israel’s public sector, where wages are, for the most part, assigned by a formula, there was a 21% wage gap in 2014.

The researchers, however, said their finding did not take into account the possibility of women working extra monthly hours, because those might be offset by men working less or other redistributions for child and family care, which tend to fall more heavily on women's shoulders. In that regard, the researchers said, the study's findings were conservative.

"Beyond the implications this has on the status of women in society, it is likely that gender segregation in the labor market affects economic productivity, due to an inefficient allocation of resources and skills," the study concluded.

The researchers based their methodology on previous research done by the OECD and consultancies such as PriceWaterhouseCoopers and McKinsey in other places. Like those studies, it assumed that men’s salaries would not be altered by the change in women’s income.

Related Content

Workers strike outside of the Teva building in Jerusalem, December 2017
December 18, 2017
Workers make explosive threats as massive Teva layoff strikes continue